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Fiscal consolidation and income inequality in Latin America and the Caribbean

Komatsuzaki, Takuji (2024) Fiscal consolidation and income inequality in Latin America and the Caribbean. Economía, 23 (1). 74 – 88. ISSN 1529-7470

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Identification Number: 10.31389/eco.437


This paper estimates the effects of past fiscal consolidations in Latin America and the Caribbean (LAC) on income inequality. For the 13 LAC countries with fiscal consolidation episodes identified by the narrative approach, one percent of GDP fiscal consolidation increases the disposable Gini coefficient by 0.12 percentage point on average in five years. The size of the effect tends to be larger for tax-based consolidations and for non-commodity exporters but broadly similar during booms and slumps.

Item Type: Article
Official URL:
Additional Information: © 2024 The Author(s)
Divisions: LSE
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HB Economic Theory
JEL classification: D - Microeconomics > D3 - Distribution > D30 - General
E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H20 - General
H - Public Economics > H5 - National Government Expenditures and Related Policies > H50 - General
H - Public Economics > H6 - National Budget, Deficit, and Debt > H60 - General
O - Economic Development, Technological Change, and Growth > O5 - Economywide Country Studies > O54 - Latin America; Caribbean
Date Deposited: 28 Mar 2024 15:30
Last Modified: 16 May 2024 04:22

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